On this week’s episode of Economic Update, Professor Richard Wolff discusses how FED Chair Jerome Powell admits capitalism's intrinsic instability, a Tennessee plastic plant won't let workers leave before storm Helene hits, we examine new drugs for obesity (Ozempic and Wegovy) which highlights the failures of for-profit medical care. Finally, we interview Jordan Chariton on his new book "We, the Poisoned: Exposing The Flint Water Crisis Cover-up and the Poisoning of 100,000".
Economic Update
Economic Update: Flint: The Water Crisis Persists
Support from the production of Economic Update comes in part from Democracy at Work. A non-profit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University, has authored numerous books on the subject of social economics including Greek thinking Marxism, Understanding Capitalism and Democracy at Work are here for capitalism. Further information is available at democracy@work.info and rdwolf.com. Welcome friends to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host Richard Wolff. Today's program I'm going to jump into in a moment but as usual I want to start by reminding you that Charlie Fabian stands ready to receive emails from you if you have suggestions or proposals for the program. You can reach him at charlie.info438@gmail.com. Today we're going to talk about the Federal Reserve under Jerome Powell. We're going to talk about a company in Tennessee devastated by the hurricane Helene and finally about the two new hot obesity drugs they're called ozimpic and wagovii and what they're about economically speaking. So let's jump right in. Fed chair Jerome Powell said the following on September 30th few weeks ago. "There's really nothing that I can point to," said Mr. Powell in the economy that suggests that a downturn now is more likely than it is at any time close quote. I found this remarkable. The head of the monetary authority and system of the United States admits that in capitalism a downturn can happen any time because if it's no more likely than any time now then it's also no less likely either. That's what his words mean. That's what the man said. Wow. You know what that means? It means that we have a window which I'm not going to avoid jumping through to take a real hard look at the instability that capitalism represents. The fact that as a system we are always at the edge of a downturn and upturn it's an unstable system. That's the reality and Mr. Powell, head of the Fed, knows what he's talking about. There is, after all, another governmental agency, the National Bureau of Economic Research known among economists as the MBER that keeps track of the ups and downs of the unstable capitalism we live in. And here's what it found, the MBER. Every four to seven years we have a downturn. That's the average. Sometimes it's four, sometimes it's seven, sometimes a little less even than four. I mean that's an average. But it means that in your lifetime in mind we are going to go through a roller coaster capitalism many times zooming up, zooming down. And let me remind you what a zoom down means. Millions of people thrown out of work. Tens, hundreds of thousands of medium and small businesses and a few big ones going out of business, throwing large numbers of people out of work, plunging whole communities, sometimes whole states into economic depression. Now this is a terrible quality of capitalism. Should have made us question the system long ago. In fact, here's a double irony. The Federal Reserve was created at the beginning of the 20th century in order to deal with that instability. The two charges of the Federal Reserve in the legislation that created it were to maintain price stability and full employment. Well, we haven't done that. The Federal Reserve hasn't been able to overcome the instability. We just came off of the latest horrible inflation and we're on the edge of a downturn into recession, which is why Mr. Powell made those comments. All of Wall Street is hoping we have what they call a soft landing. You know what that means? Not so many people losing their jobs. Not so much breakdown. But overcoming the instability never did possible. Try again. A whole economics, cocaine's in economics, devoted to trying to figure out how to do it doesn't work. Capitalism's instability is with us so long as capitalism is and therein lies a message you ought to think about long and hard. I want to turn next to Irwin Tennessee. Irwin is the site of a company called Impact Plastics. And during the horrible Helene floods in September of this year, 11 workers there were swept away. At least that's the latest numbers I could find. Six of those 11 are either already pronounced dead or missing and feared to have drowned or been somehow injured or killed. Almost all of these folks are Spanish-speaking immigrants. It's an aspect of the immigrant experience you don't hear so much about. How they do the work at the lowest paid jobs. How they provide lowest price goods as a result for the rest of us to be able to afford. No, no, no. We don't want to talk about the benefits of employees who are immigrants. We prefer to demonize them for the political gain demagogues can get by doing that. But let's go back to Impact Plastics. What happened, according to the interviews with many of them, was that they had to go to work. They don't have any money. They can't miss a day at work. There were plenty of announcements that the horrible storm was coming. There were parts of the country that got prepared, not as much as they should have, but to some degree. Even in Tennessee, even in Erwin, children in schools having heard the announcements were told, "Don't come to school. It'll be too dangerous and difficult to get back home." But not the immigrant workers of Impact Plastics. Oh, no. They went to work. And when it got really dangerous, when the parking lot was full of water in a way they had never seen, they wanted to go home early. But the employer told them they couldn't. They would risk their jobs. To be fair, the employer says, "No, no, no, no. We didn't say that. We didn't do that." And maybe they said it or didn't. We'll never know for sure. We weren't there. But the story repeats itself over and over. And we all know why the employer might have done what the employees say the employer did. Why? Because it's profits for the employer. There's always lots more immigrants you can hire if these never come back. But for those who don't come back, who are mothers and fathers and children and brothers and sisters, no coming back if you're dead, profits over people. That's how it works in this kind of economic system. It is something to think about. Why aren't there laws that require not just that public facilities be closed when you know a terrible storm is coming? But private ones too. Oh, the private employers don't want the government to tell them what to do. They rather be free to what? Kill their employees? The third economic update we have time for today is about two new drugs that have come on the market as cures for diabetes and even more spectacularly for obesity. The medical profession in the United States says that 40% two out of five Americans are obese. So much overweight that it is a serious medical health condition. These two drugs, therefore, are a profit bonanza for the companies producing them because 40% of the American people is over 100 and X million buyers. But that isn't the big news for the profiteers. Here it comes. If you are not insured for these particular drugs in this medical emergency, here's what you would have to spend to get ozempic or wagovii, the names of the two drugs. $1,000 to $1,300 per month is the cost of these drugs. You want to do something about obesity that threatens your health, that of your family, that of the community in which you live incurring enormous health care costs over many years. Is that a concern? Well, you can deal with it so long as you can part easily with $1,000 to $1,300 per month. Even if you are insured, it can cost hundreds or thousands per year to treat you. And who causes this? Well, the medical profession has worked out that there are three competing players in the game. There are the drug producers, the ones who make these drugs. There are insurance companies, the ones that ensure you against the diseases for which these drugs are suggested. And then there's that in between character called the benefit manager, the company that decides when and how to charge you exactly how much for the drugs that come from the company and the money paid to the benefit managers by the insurers. Bernie Sanders held Senate hearings recently to show and expose the horror of all of this and how it ends up costing people who have a disease $1,300 a month if they hope to survive it. He showed how that introduces prices for these drugs here in the United States that are five, six times and more what it costs in other countries like Canada or France or Germany or Britain. You don't have to have it. We have it because we're being ripped off. And the answer to drug companies, you have to let us charge wild prices because that's the incentive for us to do the research. You know, there's an element of truth in that. But let's add some other truths. If you're making money like that, guess what you don't worry about your costs. If you allow these companies to make wild profits and drug companies and health insurers and benefit managers are wildly profitable. You know what you tell their managers? You don't have to worry about the cost. We're going to make so much money off the price we can charge that you can go ahead and have three extra scientists and four extra. It's not a question as an incentive not to worry about cost because you're going to make such a bundle. Where's the talk about that? There is none. They don't admit it. And what about the fact that if you charge that amount of money, there are millions of people who can't afford it and who will die of these diseases? What about that as a cost? We don't hear that. We hear only about the incentives that they want us to think about. Private, profit-driven medicine always was a mistake. That's why so many other countries don't allow it to operate the way they do here in the United States. We've come to the end of the first half. Stay with us. We're going to have a remarkable interview with a remarkable journalist when we come back. Welcome back friends to the second half of today's economic update. I am very happy to bring to the microphones and cameras Jordan Chariton. He has a very well-known podcast. I've been on it a few times. He's been gracious to invite me to do it and I'm very eager to return the favor and to get his wisdom on our program as well. Jordan Chariton is an independent investigative reporter known for major stories like the Flint water crisis, the Native American protests over the Dakota Access Pipeline, the 2016 and 2020 presidential campaigns, and in 2018 he launched his own independent news outlet, Status Cool News. Cool is C-O-U-P. He's probably best known for his tireless reporting on the Flint water crisis, which we have talked about on this program too. One of the worst environmental catastrophes of the 21st century, in August of this year he published a book with the following title, We the Poison, exposing the Flint water crisis cover-up and the poisoning of 100,000 Americans. His work has been featured in Vice News, The Intercept, The Hill, CNBC, Mediaite, Detroit Metro Times, and other outlets. You can follow his work on YouTube, Twitter, and Status Cool. So first of all, Jordan, thank you very much for joining with us today. Hey, thank you for having me. So let's start right where we can with your book, your brand new book. What's the purpose? Why did you do the work I know goes into writing books? Why did you do it? What was the thing that the passion or the drive that made you do that? Twofold. One, I think too often our media normalizes things that are not normal, and the media, for a lot of reasons, has basically swept the Flint water crisis under the rug and pushed a narrative that it was over. And based on my reporting, it is not over. It's still waging as an active crisis. So I wanted Americans to know this is still going on. It's not fixed, and it is a major, major disaster still. And the second reason is based on my reporting, I believe firmly this is the biggest government cover-up of the 21st century. And I would venture to guess 99% of Americans don't know the details. So I wanted to wake people up that this is still going on, and basically plot out the who, what, when, why, and where of this cover-up. Okay, let me start by being an average American. Here's what I know, and I want you to correct or elaborate. I know that at a certain point, large numbers of people got sick because of the contamination of drinking water that was ultimately coming out of the Detroit River or other rivers that converge there in that area of Flint, Michigan. And a lot of noise was made. It turned out it'd been going on for a long time. And then the government had to step in, and as you put it, fix it. And then it faded out of the news, and it faded out of my consciousness. Help me understand what has actually happened that made you write the book. So I'm sure you cover privatization in America, and most people do not know that the Flint water crisis was born from a for-profit privatization scheme. The cliff notes version, Flint got its water from the city of Detroit for 50 years without a problem. Detroit sent the water in a water pipeline for a lot of reasons, city officials, state officials, and some wealthy people wanted to build a new water system. And they used the city of Flint basically as the guinea pig to build that new privatized water system. So Flint switched to a new water system, which was going to feed raw water from the city of Detroit to Flint. And that raw water was mostly going to be used not for residents to drink, but for business, fracking, auto industry, farming, agriculture. They called it the blue economy. And as that new water system was being built, it was going to take two years, the geniuses in the state and the city and the unelected emergency manager, because this is also an issue of democracy. Flint was basically an unelected emergency manager was appointed to take over the city from the elected officials. They said, while this new unnecessary water system is being built, we'll use this heavily polluted river, the Flint River, which GM and other companies had dumped their waste into forever. And we'll use the Flint water plant, which is the equivalent of these Boeing planes falling apart midair. And we know what happened. They didn't add the proper chemicals. So this was really a scam, an unnecessary new water system. And the city of Flint was essentially poisoned in order to build this new water system. And so one of the contributing factors was the private estate. In other words, the company that stood to benefit as private profit-making by being part of this whole operation, is that correct? Absolutely. And it gets even more sinister, because there's plenty of privatization schemes that aren't deadly. But Flint, at this time of the water switch, 2013, 2014, Flint was broke. It was nearly bankrupt. And legally, it had no credit rating. It could not borrow more money. But the unelected emergency manager, the Republican administration and local officials in Flint, they needed Flint to help fund the construction of this new water system. So, had as a broke city borrow $100 million to help fund an unnecessary fraudulent scam pipeline, they created a fake emergency. They created a fake emergency that would allow a nearly bankrupt city an exception to borrow $100 million to help fund the construction of this pipeline. The emergency was something small, like the cleanup of a lime sludge pit next to the Flint water plant. And in that agreement, it was stated that it was for an environmental cleanup, through the back door, they snuck in Flint being able to issue $100 million in bonds for this new water system. And in that deal, they handcuffed Flint. The fine print said, while this new water system is being built, Flint has to use the Flint River, and it has to use the Flint water plant as my book details. I mean, the governor was warned a year before the water switch, the Flint River would pose bacterial risks to residents and carcinogen. There were carcinogens in the water, cancer, causing chemicals. The governor ignored it. Plant workers, I have a whole chapter, plant workers six months to a year before were sent screaming. And I quote, "Hell no, we don't have the staff, we don't have the equipment. This plant isn't ready to switch to a polluted river." So the stop signs were blown past, there were red blinking lights blown past, and basically to switch to this new water system, and Flint was already on the hook for these bonds to start paying back the bonds. So really, there was no turning back and balance sheet, and economic numbers were prioritized over human health and human lives. What culpability attaches to the government, in other words, to the city, to the state, even to the federal, help us understand how the government interacted with these private interests to make all this happen. And along the way, why the people of Flint went along with it, I guess that's the question about the cover up. But let's start with the government. Yeah, why I call this the biggest government cover up is it's all levels. You have the EPA was involved on the federal level, you have the Republican administration, the Snyder administration in Michigan, you also have Flint city officials, you have county officials, you have a private foundation which was involved in Flint that was pulling a lot of the strings behind the scenes, and you have Wall Street banks. I should mention those bonds were issued by JP Morgan and Wells Fargo. So you have this big cabal of government banks, foundations, and essentially, you, right now, we're being fed nonstop, democracy is on the line with the 2024 election. This is actually an example where democracy was removed. An unelected emergency manager was appointed, four of them, to cancel out people's votes. The people of Flint did not vote, for a new water system. The people of Flint did not vote to use the Flint River or the water plant. They certainly didn't vote for the city to borrow $100 million, which they ended up having to pay for. Their votes were canceled because the emergency manager took power over the elected mayor and city council. So that's the dark underbelly of this democracy was removed, and the government was basically working hand in hand with Wells Fargo and JP Morgan to come up with this cockamamie scheme to allow a broke city to borrow $100 million. When I say unnecessary, you don't have to be an engineer to understand. It's kind of unheard of to build a completely duplicative water pipeline, or any pipeline, that runs along the same exact path as the existing pipeline from Detroit to Flint, that pumped water out of the same exact source, Lake Huron. They built a duplicative pipeline, essentially, to make money. And there was a lot of money to be made. The contractors who got the contracts to build this new water pipeline, the engineering firms that outlined and drew up the plan. Land owners who mysteriously bought land along the pipeline path before it was announced. So it was a big economic scam and boondoggle, and unfortunately, the poor people and majority black city of Flint was poisoned as a result. Tell me a little bit about the poisoning. Do you have some, give us a sense of the scale of that? Yeah, why I call it an ongoing disaster, because, you know, people, it's out of sight and out of mind if you don't hear about these things. Ten years later, people are still getting rashes on their skin in Flint. I was just there for my book. People are showing me their rashes from the water. People have burning eyes when they shower. There are people still losing hair from the water, and that's not even to mention cancer is surging in Flint. Ten years later, certain types of cancer and NYU toxicologist did a research study. She's finding certain types of cancer are up between 300 and 500%. And that cancer is a result of lead damaging people's bodies and brains. You also had bacteria in the water that killed a lot of people. You also have PFAS, which are those forever chemicals that are spreading all over the country. Not to mention, General Motors and other companies had dumped their waste to the Flint River for 100 years. So between cancer, a lot of people have died of liver problems, kidney problems. I mean, lead is a wrecking ball to human organs. And then you got the children. We have a lost generation in Flint. Learning disabilities are up. Autism is up. Reading regression, math regression. Then you have the behavioral problems because lead really affects your mood and impulse control. So crime goes up. And now I'm learning that there is a spike in teenagers committing suicide. Those teenagers were children when this happened. So this was basically a sacrifice zone that the media has pushed an narrative that, yes, this was a tragedy in the past, but it's now in recovery. Well, that doesn't sound like a recovery to me when people are dying in massive cancer. They don't have free health care, which they deserve. There's no criminal justice either. No one has been held accountable or sent to prison. So I don't even call it the Flint water crisis. I call it the Flint water disaster that is ongoing. John, we have only a really a few seconds left. And I know this is a difficult question. What lesson would you say the American people need to draw from what happened here in terms of the research you did? If you are in the wrong city or town at the wrong place, and if you don't quite have the necessary amount of money in your bank account, or you might be the wrong skin color, the government is not coming to your rescue. And don't think that this is just about Flint. This could happen to anybody anywhere because a privatization and for-profit schemes do not just happen in poor towns. They happen a lot in poor communities, but this kind of immoral for-profit privatization schemes are happening all over the country, and government officials are knowingly disregarding people's safety and health for their own political survival and profit. So the government's not coming to your rescue, and I really hope people get the book because you need to know if we don't know how they did it in Flint, and how they're still getting away with it, then you're not going to be able to stop it elsewhere. You're a very good spokesman, Jordan Chad, and for what you have told us today. Thank you very much for your time, and let me just add my strong recommendation to everyone. Get a hold of we, the poisoned. It'll be a read that may enable you to make a difference where you live so that you don't repeat this kind of experience. And as always, I close by saying I look forward to speaking with you again next week. Support from the production of Economic Update comes in part from Democracy at Work, a nonprofit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst, and a visiting professor at the New School University, has authored numerous books on the subject of social economics, including rethinking Marxism, understanding capitalism, and democracy at work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com. (bell dings)